These days almost every company has to be a tech company. But IT costs can be prohibitive, with research from Lloyds finding that this area accounts for 20% of a new business' expenditure - the largest proportion after property ( 25%).
A recent survey from
Spiceworks found that 89% of organisations expect their IT budgets to increase or stay the same in 2019, and IT budgets in large enterprises are expected to increase. Despite this, more businesses understand the impact of IT spending and naturally are looking for the best options to save money.
IT spending can cover a vast range of areas including business applications, networking, IT personnel, end-user technology and data centres.
A more efficient IT setup will save time and money on maintenance and management that can free up funds for new projects and other business priorities.
Trimming down IT expenditure can also have the effect of streamlining and focusing IT strategy to make them more responsive to wider company aims.
Read on for CIO UK's advice on how to reduce your IT costs.
November 21, 2018
1. Analyse your current IT setup
Given the rapid pace of change in the IT sphere, it’s important to keep reviewing your current IT plan and expenditure to ensure you are operating in the most efficient manner.
This will involve regularly analysing your current setup and deciding whether it is working in the most proficient and cost-effective way.
Audit the current costs and compare your existing methods with others on the market to evaluate whether there is a better value alternative out there that could replace it.
Understand how software is being used in your organisation and whether swapping to a cheaper license supporting fewer features would be sufficient for your IT needs.
You could perhaps consider scrapping some utilities altogether if they're ineffective or their function is fulfilled by another tool. Instead, you could consolidate your existing software and services among the fewest vendors possible. One such area of potential reduction is your computing and storage capacity - if you’re not maximising it, consider reducing your allowance.
4. Align expenditure with business strategy
Think about aligning business and IT needs, and modifying systems to suit immediate organisational objectives.
If you are looking to reduce costs, you should prioritise IT expenses which are essential for the business in the short-term, and postpone costly IT-related activity that is more geared towards long-term outcomes or simply isn’t critical to the organisation.
These can be budgeted for as business resources allow.
Those deemed essential in the short term should support an important near-term goal for the business, lead to lower costs, or negate risk of damaging operations. To do so, you will need to engage in cross-departmental evaluations about business objectives and the best way to support these from an IT perspective.
7. Consider the cloud
Cloud computing will save you money on the capital costs of in-house IT servers and network equipment, and replace them with operating expenses - it’s often cheaper to rent than to buy.
It also reduces the effort and spending of setting up and maintaining servers and can make it easier to add further capabilities.
Do a detailed investigation of different cloud platforms before selecting whose price and functions align most closely to your organisation.
Richard Orme, CTO of Photobox Group, explained to CIO UK his organisation’s decision to move to the cloud. “The reason for us deciding to migrate to the cloud was fundamentally to do with the fact that we were starting to hit the edges as to what we could do, in terms of storage." "We were starting to reach a point where we were spending a lot of time just maintaining the hardware and the equipment within the data centres that we had. That really then takes us away from the investments that we like to make, and the customer journeys, and the ability to innovate in the physical product space.”
11. Start small
Often businesses can get distracted by the allure of emerging technologies and be tempted to go big when it comes to IT solutions. However, smaller changes such as reducing utility bills, upgrading equipment and moving to a paperless system can still make meaningful differences to a business.
Brussels Airlines, Trainline, Blackpool Teaching Hospital NHS Foundation Trust and Greenpeace UK are just some of the organisations who have made small changes with a lasting impact on their operating strategies.
Blackpool Teaching Hospital NHS Foundation Trust CIO Steve Bloor said in an interview with CIO UK , that the organisation aims to go paperless which will improve patient care and IT reduce costs.
"We want to not only gain more efficient patient care by using the most advanced patient record available but at the same time achieve value for money, through an open and collaborative roadmap for ongoing software development. "Open source will lower the costs of ownership, which will give us the flexibility with how we develop the software in going forward," he said.